Energy Transfer’s $5 Billion Acquisition of SemGroup

BofA Merrill Lynch acted as exclusive financial advisor to Energy Transfer and Latham & Watkins LLP acted as legal counsel. Jefferies LLC acted as exclusive financial advisor to SemGroup and Kirkland & Ellis LLP acted as legal counsel.

Energy Transfer LP (NYSE: ET) entered into a definitive merger agreement whereby Energy Transfer will acquire SemGroup Corporation (NYSE: SEMG) in a unit and cash transaction valued at $17 per share, or a total consideration including the assumption of debt of approximately $5 billion, based on the closing price of ET common units on September 13, 2019.

The merger consideration consists of $6.80 in cash and 0.7275 of an ET common unit for each outstanding share of Class A Common Stock of SemGroup, or 40% cash and 60% equity. This represents a 65% premium to the closing price of SemGroup shares as of September 13, 2019.

The transaction is expected to close in late 2019 or early 2020, subject to the approval by SemGroup’s stockholders and other customary regulatory approvals.

Upon the closing, SemGroup stockholders are expected to own approximately 2.2% of Energy Transfer’s outstanding common units.

Energy Transfer’s acquisition of SemGroup will increase Energy Transfer’s scale across multiple regions and provide increased connectivity for Energy Transfer’s crude oil and NGL transportation businesses.

The combined company expects to generate more than $170 million of annual run-rate synergies, consisting of commercial and operational synergies of $80 million, financial savings of $50 million and cost savings of $40 million.

Energy Transfer LP owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all of the major domestic production basins.

SemGroup® Corporation moves energy across North America through a network of pipelines, processing plants, refinery-connected storage facilities and deep-water marine terminals with import and export capabilities. SemGroup serves as a versatile connection between upstream oil and gas producers and downstream refiners and end users.

Latham & Watkins LLP advised Energy Transfer LP with a Houston-based corporate deal team led by partners Bill Finnegan (Picture) and Debbie Yee with associates Kevin Richardson, Dan Harrist, Madeleine Neet, Caroline Ellerbe and Ashlyn Royall. Advice was also provided on tax matters by Houston partners Tim Fenn and Bryant Lee with associates Jared Grimley and Michael Rowe; on benefits and compensation matters by Washington, D.C. partner Adam Kestenbaum with associate Stephanie Jeane; on antitrust matters by Washington, D.C. partners Michael Egge and Jason Cruise with counsel Peter Todaro; on environmental matters by Houston partner Joel Mack with Washington, D.C. associate Joshua Marnitz; and on finance matters by Houston partner Pamela Kellet with associate Michelle Synhorst.

Kirkland advised SemGroup with a team led by transactional partners Sean Wheeler and Doug Bacon and associates Allan Kirk, Camille Walker, Daniel Cadis, Zach Montgomery, Adam Wojcik and Arthur Lotz; executive compensation partner Scott Price and associate Laura Gallo; environmental partner Stefanie Gitler and associate Devi Chandrasekaran; debt finance partner Mary Kogut Brawley; and tax partner Mark Dundon and associates Joe Tobias and Radina Angelova.

Involved fees earner: Radina Angelova – Kirkland & Ellis; Doug Bacon – Kirkland & Ellis; Daniel Cadis – Kirkland & Ellis; Devi Chandrasekaran – Kirkland & Ellis; Mark Dundon – Kirkland & Ellis; Laura Gallo – Kirkland & Ellis; Stefanie Gitler – Kirkland & Ellis; Allan Kirk – Kirkland & Ellis; Mary Kogut Brawley – Kirkland & Ellis; Arthur Lotz – Kirkland & Ellis; Zachary Montgomery – Kirkland & Ellis; Scott Price – Kirkland & Ellis; Joe Tobias – Kirkland & Ellis; Camille Walker – Kirkland & Ellis; Sean Wheeler – Kirkland & Ellis; Adam Wojcik – Kirkland & Ellis; Jason Cruise – Latham & Watkins; Michael Egge – Latham & Watkins; Timothy Fenn – Latham & Watkins; William Finnegan – Latham & Watkins; Jared Grimley – Latham & Watkins; Daniel Harrist – Latham & Watkins; Pamela Kellet – Latham & Watkins; Adam Kestenbaum – Latham & Watkins; Bryant Lee – Latham & Watkins; Joel Mack – Latham & Watkins; Joshua Marnitz – Latham & Watkins; Madeleine Neet – Latham & Watkins; Kevin Richardson – Latham & Watkins; Caroline Robinson Ellerbe – Latham & Watkins; Michael Rowe – Latham & Watkins; Ashlyn Royall – Latham & Watkins; Stephanie Jeane – Latham & Watkins; Michelle Synhorst – Latham & Watkins; Peter Todaro – Latham & Watkins; Debbie Yee – Latham & Watkins;

Law Firms: Kirkland & Ellis; Latham & Watkins;

Clients: Energy Transfer LP; SemGroup Corp.;